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DOD Budget Request Adapts to Fiscal Realities, Hagel Says

WASHINGTON, March 6, 2014  The Defense Department’s latest budget request is a collaborative proposal that has adjusted to new strategic realities and fiscal constraints for the future, Defense Secretary Chuck Hagel said here today.

Hagel, joined by Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, testified before the House Armed Services Committee on the department’s fiscal year 2015 budget request, calling it a realistic budget to prepare the U.S. military for a dynamic national security landscape.

“I believe this budget is far more than a set of numbers or just a list of decisions,” he said. “It is both of those, but it is a statement of values and priorities. It prepares the United States military to defend our national security in a world that is becoming less predictable, more volatile, and in some ways, more threatening to our country and our interests.”

The defense secretary said the proposal is a plan that allows the military to meet America’s future challenges and threats.

“It matches our resources to our strategy, and it’s a product of collaboration,” Hagel said. “All of DOD’s military [and] civilian leaders were involved in this process.” He noted that every level of department leadership had input into the process of forming the budget proposal.

As America ends its second war of the last decade and its longest ever, the secretary said, the budget is not business as usual. “We’re all living at a very unusual time,” he added. “It may well be, when history records this time, a very defining time.”

The nation’s leadership has worked through an unprecedented period of fiscal uncertainty and unpredictability over the last 24 months, Hagel said, leading to some “hard choices.”

“The longer we defer these difficult decisions,” he said, “the more risk we will have down the road forcing our successors to face far more complicated and difficult choices in the future.

“Last year,” he continued, “DOD’s budget was cut $37 billion because of sequestration on top of the $487 billion, 10-year reduction under the Budget Control Act that DOD was already implementing.”

The defense secretary noted while December’s Bipartisan Budget Agreement gave DOD some temporary relief, it still imposes more than $75 billion in cuts over the next two years.

“Unless Congress changes the law, sequestration will cut another $50 billion again starting in fiscal year 2016,” Hagel said.

The president’s five-year plan, he said, provides a realistic alternative to sequestration-level cuts, projecting $115 billion more than current law allows. Hagel said this additional funding is required to implement DOD’s updated defense strategy as outlined in the Quadrennial Defense Review.

“As you know, the QDR takes a strategy-driven look at the security landscape over the coming decades,” he said. “This QDR is not budget-driven, [nor] is it budget-blind. It builds on the president’s defense strategic guidance and is informed by our resource limitations.”

The QDR defines the risk assumed under the president’s budget request and under sequestration, Hagel said, which is the only realistic way to ensure a useful and relevant strategy.

Hagel said these “are not ordinary times,” and the QDR’s strategic priorities represent America’s highest security interests -- defending the homeland, building security globally, deterring aggression, and being ready and capable to win decisively against any adversary. The president’s budget, he added, would allow DOD to execute this strategy with some increased risk in certain areas, which the department has been very clear about.

Hagel said those risks would be reduced if Congress approves the president’s Opportunity, Growth and Security Initiative, an additional $26 billion in 2015 to improve readiness and modernization.

“Although our five-year budget plan exceeds sequestration levels, over the past year, DOD has prepared detailed planning for continued sequestration-level cuts,” he said. “This showed that a return to sequestration would impose some force structure reductions that simply can’t be implemented with the push of a button.” These reductions, he added, would require detailed planning and longer time horizons to implement.

“Our five-year defense plan, therefore, hedges and includes the sequestration-level force structure reductions that take longest to plan and to implement,” Hagel said, citing the decommissioning of the aircraft carrier USS George Washington, and the Army and Marine Corps end strength cuts below preferred levels.

The defense secretary said DOD leaders agree their preferred force levels can be sustained by the president’s budget level and are fully funded in fiscal 2015. Accordingly, he said, he’s issued formal guidance to service leaders to find their preferred force levels and not make sequestration-level reductions if they judge that Congress will fund the president’s budget levels over the next five years.

“DOD has a responsibility to prepare for all eventualities, just as Congress has a responsibility to provide DOD with some budget predictability,” he said.

Hagel also discussed what he called “critical issues,” such as the balance between readiness, capability and capacity.

“After more than a decade of long, large stability operations, we traded some capacity to protect readiness and to protect modernization,” he said. “We did this as we shift to focus on future requirements shaped by enduring and emerging threats. We have to be able to defeat terrorist threats and deter adversaries with increasingly modern weapons and technological capabilities.”

The military also must assure America’s economic interests are protected through open sea lanes, freedom of the skies and space, and cyberattacks, which is why the funding for those areas has been protected, Hagel said.

The defense secretary outlined force structure levels and reductions for each military service.

“For the active duty Army, we propose drawing down about 440,000 to 450,000 soldiers,” Hagel said. “That’s less than 10 percent below its size pre-9/11 [end strength]. I believe this is adequate; our leaders believe it is adequate for future demand. Army National Guard and [Army] Reserve units will remain a vibrant part of our national defense, and will draw down by 5 percent.”

The Army’s helicopter force structure will be streamlined, reducing the National Guard’s fleet by 8 percent and the active Army’s fleet by 25 percent, Hagel said, as it moves from a fleet of seven models to four.

“The Navy, for its part, will take 11 ships out of its operational inventory, but they will be modernized and returned to service with greater capability and longer lifespan,” the secretary said. “The Marine Corps will continue its planned drawdown to 182,000, but will devote 900 more Marines to increase embassy security. And the Air Force will retire the aging A-10, replacing it with more advanced multi-mission aircraft like the joint strike fighter.”

Hagel said the president’s defense budget request supports DOD’s strategy, defends the country and preserves commitments to the workforce.

“These commitments would be seriously jeopardized by a return to sequestration-level spending,” he said. The result would be a military unable to fulfill its defense strategy putting America’s traditional role as a guarantor of global security, and its own security at risk, he added.

Dempsey agreed, noting that “the balance between our security demands and our available resources has rarely been more delicate.”

“The secretary walked you through the measures we're taking in this budget to try to balance as best we can national security and fiscal responsibilities,” Dempsey told the panel of lawmakers.